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Parental leave and mothers' careers: the relative importance of job protection and cash benefits


Lalive, Rafael; Schlosser, Analía; Steinhauer, Andreas; Zweimüller, Josef (2014). Parental leave and mothers' careers: the relative importance of job protection and cash benefits. Review of Economic Studies, 81(1):219-265.

Abstract

Job protection and cash benefits are key elements of parental leave (PL) systems. We study how these two policy instruments affect return-to-work and medium-run labour market outcomes of mothers of newborn children. Analysing a series of major PL policy changes in Austria, we find that longer cash benefits lead to a significant delay in return-to-work, particularly so in the period that is job-protected. Prolonged parental leave absence induced by these policy changes does not appear to hurt mothers' labour market outcomes in the medium run. We build a non-stationary model of job search after childbirth to isolate the role of the two policy instruments. The model matches return-to-work and return to same employer profiles under the various factual policy configurations. Counterfactual policy simulations indicate that a system that combines cash with protection dominates other systems in generating time for care immediately after birth while maintaining mothers' medium-run labour market attachment.

Abstract

Job protection and cash benefits are key elements of parental leave (PL) systems. We study how these two policy instruments affect return-to-work and medium-run labour market outcomes of mothers of newborn children. Analysing a series of major PL policy changes in Austria, we find that longer cash benefits lead to a significant delay in return-to-work, particularly so in the period that is job-protected. Prolonged parental leave absence induced by these policy changes does not appear to hurt mothers' labour market outcomes in the medium run. We build a non-stationary model of job search after childbirth to isolate the role of the two policy instruments. The model matches return-to-work and return to same employer profiles under the various factual policy configurations. Counterfactual policy simulations indicate that a system that combines cash with protection dominates other systems in generating time for care immediately after birth while maintaining mothers' medium-run labour market attachment.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Uncontrolled Keywords:Parental leave, family and work obligations, return-to-work, labour supply, earnings, family earnings gap
Language:English
Date:January 2014
Deposited On:20 Jan 2015 15:58
Last Modified:08 Dec 2017 10:26
Publisher:Oxford University Press
ISSN:0034-6527
Additional Information:This is a pre-copyedited, author-produced PDF of an article accepted for publication in the Review of Economic Studies following peer review. The definitive publisher-authenticated version Review of Economic Studies (2014) 81 (1): 219-265. doi: 10.1093/restud/rdt028 is available online at: http://restud.oxfordjournals.org/content/81/1/219
Publisher DOI:https://doi.org/10.1093/restud/rdt028

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